March 25, 2014
Consumers, Environment, Climate at Risk With Liquefied Natural Gas Export Push; National Energy and Climate Plan Needed
Statement by Tyson Slocum, Director, Public Citizen’s Energy Program
Note: Today, the U.S. Senate Energy and Natural Resources Committee holds a hearing titled “Importing Energy, Exporting Jobs. Can it be Reversed?”
Today’s hearing on promoting exports of liquefied natural gas (LNG) fails to recognize that decisions to prioritize natural gas and other fossil fuel exports should not occur without a national energy and climate policy that comprehensively establishes a clear path for consumers to enjoy access to affordable, reliable and sustainable energy for generations to come.
Making quick decisions to more easily export natural gas or other fossil fuels in response to current perceived production gains and/or geopolitical events – such as the Russian annexation of Crimea – risks exposing American consumers to higher and more volatile prices. And fossil fuel export decisions should not be considered until analyses demonstrate that such actions will not threaten the environment or exacerbate climate change.
While fracking has led to record domestic oil and natural gas production, it has failed to deliver consistently low or stable prices to consumers. January 2014 saw the largest natural gas price spikes in history, as some eastern hubs close to the heart of fracking country saw prices rise from $10 per million British thermal units to $140 per million British thermal units in just a matter of days. Expediting the export of fracked natural gas will further constrain supply, resulting in more frequent price spikes and increased volatility.
Exporting U.S. liquefied natural gas cannot serve as an effective counterweight to Russian dominance of European gas markets because: a) The U.S. will not be able to export adequate volumes abroad to diminish Russian supply without causing significant supply and price disruptions domestically; and b) geographic LNG export decisions are not made by U.S. government agencies prioritizing national geopolitical interests but rather by private energy companies signing contracts with other private entities to obtain the highest possible price. So far, the vast majority of U.S. LNG exports are committed to Asia, where natural gas prices remain consistently higher than in Europe.
Debating LNG exports absent a broader policy discussion involving the development of a national energy and climate policy that establishes clear regulatory and incentive programs to deliver affordable, reliable and sustainable energy is irresponsible. A progressively structured price on carbon, coupled with regulations on greenhouse gas and other harmful emissions, would provide not only a solid framework to guide consumers and producers, but could help finance the billions of dollars needed for sustainable energy infrastructure development.